Downtown offices become worthless.

Downtown Los Angeles is rich with architectural jewels: Towering brass and marble lobbies, grand staircases, exquisite handcrafted Art Deco glasswork are commonplace in downtown's historic structures.

Most fall under the designation Class C and in today's real estate market, they're essentially

"You could not give away most of those old buildings," said David Zoraster, vice president of CB Commercial Real Estate Group. "Believe me, they've tried."

Added downtown office broker Jerry Egelstrom of Cushman & Wakefield Inc.: "We love those buildings - people walk inside and 'ooh' and 'ahh' because they're so unique. But we don't lease space in them. Instead we go to the building across the street."

The Class C office market comprises about 10 percent of downtown's total inventory of office space. And fully half of that Class C space sits empty.

Many of the buildings have been boarded up for years, with owners only hanging on in the hope the market will recover sufficiently to make the underlying land valuable enough to warrant razing the structures and either redeveloping the sites or selling them off.

Even those Class C buildings with tenants would almost be more profitable if they were torn down.

"Almost, and that's the problem," said Raymond Lepone, vice president at Grubb and Ellis Co.

For now, owners of such buildings as the Bank of California and the old Sanwa Bank building have decided that the best use of their properties is simply to board them up and wait until the downtown office market is tight enough to justify new development.

Downtown's overall office vacancy rate is now about 18.5 percent, and that rate would need to drop to the 10-percent range for new development to become feasible.

One of the problems facing downtown's Class C buildings is that their long-held competitive advantage - cheap rent - has effectively disappeared.

Owners of downtown's sparkling Class A towers, desperate for tenants, have dropped their rents substantially. In fact, once the Class A buildings' generous concessions - new carpeting, paid utilities, etc. - are considered, Class C space can't be given away for less.

Premium Class A space downtown is going for an average monthly rate of $1.40 per square foot, not counting concessions. That's just 12 cents - or about 10 percent - more than the average rent for Class C space.

Even if owners of the older Class C buildings could afford to drop their rents, they probably wouldn't attract more tenants. Many of the older buildings aren't built to modern seismic and fire codes, and they haven't been renovated for a decade or more.

Then there are the structural changes taking place in the Los Angeles economy that further work against the older buildings. Their irregularly shaped floor plates aren't popular among modern tenants, who increasingly prefer the campus-style environments that facilitate communication and a team-oriented culture.

Los Angeles' downtown took the recent real estate slump particularly hard, as corporate consolidations in the banking and insurance industries shoved acres of vacant space into the market.

The slump caused many developers of the Class A buildings to be foreclosed on by their lenders. Those lenders, in turn, wrote off the original mortgages and resold the properties at lower prices. That allowed the buyers of the Class A towers to lower rents substantially, and still make a profit.

With Class A rents so low, many Class C tenants migrated up the office space hierarchy, leaving behind a barren Class C market.

"There was just no value to staying," said Whitley Collins, vice president at CB Commercial.

And for investors considering Class C buildings, the structures come with a raft of problems. Often they need seismic renovations, asbestos abatement, installation of sprinkler systems as well as upgrades to make them comply with the Americans with Disabilities Act.

Mike Dunn, director of corporate services with the Charles Dunn Co., estimates such expenses can run from $30 to $50 per square foot.

Then there are the standard common-area improvements, such as new tiles and upgrades of lobbies and elevators. Many of these buildings haven't been renovated for 10 to 15 years, according to Dunn, so rehabilitation might run about $15 per square foot, brokers estimate.

Even if such costly sprucing-up is undertaken, many Class C buildings are "functionally obsolete," said Egelstrom of Cushman & Wakefield.

Most downtown real estate agents predicted another another three to five years will pass before most of the Class C properties are recycled into new uses. There's been talk of converting the offices into lofts or building parking garages, hotels or storage spaces in their places.

Until then, "they've still got a tough road as the market heals," Dunn said.